Google has settled a class-action lawsuit over Buzz, and has agreed to a $8.5 …

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The fallout from Google's Buzz social networking aggregator continues: the company has agreed to settle a class action lawsuit over concerns that the service's original configuration violated users' privacy. While Google has made numerous changes to the service since its February launch and maintains that it did no wrong, the company has agreed to pay out $8.5 million to end the litigation.

Buzz launched in early February to a lukewarm reception, which was quickly followed by an enormous controversy over concerns that the default settings revealed private information. At the heart of the problem was an auto-follow feature meant to facilitate quick adoption. Users quickly found, however, that it could reveal their Google accounts to people they'd like to avoid. Journalists were concerned that confidential sources could be revealed to the public, while one woman noted that her private Google account was auto-followed by her abusive ex-husband.

Google worked quickly to make changes, turning the auto-follow feature off in favor of recommendations, and making some features easier to opt out of. Still, it wasn't long before a federal class-action suit was filed on behalf of all Gmail users who were automatically opted-in to the Buzz service.

In the proposed settlement submitted to the court this week, Google agreed to make efforts to better educate Buzz users on issues of privacy and the particular privacy features that Buzz offers. Additionally, Google also agreed to pay out $8.5 million to a fund which will be disbursed as cy pres awards for organizations that focus on Internet privacy policy or education.